The Rural Voice, 1986-08, Page 20i
& Agricultural
• Steel Roofing
• Siding
• Roof Trusses
WholesalelRetail
CONTRACTORS
WELCOME
We are also a full Service
Contractor for all your needs
Cunt act
R.J. STEEL
RR #1 Milverton
Ralph Haverkamp
519-595-8173
TIRES
•
AtJ
SALES & ERVICE
• Radials
Rice tires
Reg. tractor tires
• Truck tires
• Automotive tires
All makes in stock
ON FARM SERVICE
Willits
Tire Service
Lucknow
519-528.2103
Is I HE RURAL VOICE
COMMODITY WATCH
-
O
CIaw06
00
IIWAWAIMNSE
Al. Itl• itlt 6.0 I\Ia Mt
FARM COMMODITY WATCH
for the month ended July 21, 1986
CORN — Despite recent hot
weather concerns in the South -
Eastern States, corn prices con-
tinue to drift lower. December
corn futures closed on July 21 at
1.74/4, a decline of 15' cents
from levels of a month ago. Many
analysts are quick to point out that
the hot weather has principally af-
fected areas that are not major
corn growing regions. The Final
Acreage Planted figure, released
July 11 by the USDA indicated
planted acreage on corn of
76.6 -million acres, compared to
last year's figure of 83.3 -million
acres. This acreage number was
about 1.3 -million acres below the
average trade estimate, and
therefore deemed friendly to the
market. Recent Supply/Demand
statistics call for a carryover figure
of 5.024 -billion bushels — a huge
number. Moisture levels in the
corn belt are still above average
levels and the current scenario sug-
gests the potential for a record
yield situation (last year's average
yield of 118 bushels per acre was
the record yield). Mother nature
can still play havoc with the crop,
either severe hot weather, or poor
harvest conditions could change
the picture significantly.
**HEDGERS** What can you do
with $1.75 corn? Not much, but
here is something you might think
about. No doubt many producers
will be reluctant to sell corn in the
fall. This reluctance may force
basis levels upward. A producer
may be better off to sell corn with
a firm basis and repurchase his
position in the Call Option market.
His downside risk is limited, and
he has use of the balance of the
funds received from the sale of his
cash corn. Selling cash and buying
Call Options is a common
marketing strategy.
SOYBEANS — Hot and dry con-
ditions in the South -Eastern States
and the Delta regions pushed short
sellers to the sidelines pushing
markets higher in the most recent
10 days. November beans closed
on July 21 at 5.153/4, a gain of 17
cents over the month. Speculation
on weather is a typical summer
pastime, and grain traders on the
Chicago Board of Trade seem will-
ing to buy and sell beans ag-
gressively on the changing
forecasts of the weatherman. Final
Acreage numbers released by the
USDA on July 11 indicate an
acreage figure of 61.8 -million
acres, slightly higher than the
average trade estimate. Traders are
awaiting the new crop bean loan
rate, which should be announced
on or about August 1, 1986.
Speculation has it that the figure
will be $4.77. With a 4.3 Gramm-
Rudman adjustment, that figure
would then be $4.56. The Delta
and Southern states represents ap-
proximately 31 per cent of total
soybean production. The weather
situation warrants close following.
**HEDGERS** should be moni-
toring the market closely at this
time. Producers inclined to sell on
this weather rally might be well ad-
vised to purchase January Call Op-
tions, just in case we've seen the
bottom of the market!
LIVE CATTLE — Strength in the
pork coinplex carried over into the
cattle pits during the month, giving
cattle markets a substantial boost.
October cattle futures closed on
July 21 at 58.77, a gain of 8.82
over the course of the month. Hot
weather concerns have also im-
pacted the cattle market, with mix-
ed reactions, as concerns about
death loss and poor weight gains
have brought buyers to the market,
while heavier deliveries of near
market weight cattle in the South -
East and Delta areas have produc-
ed some selling. Traders should
watch for two important reports
due to be released on July 25; the
monthly Cattle on Feed report and
the semi-annual Cattle inventory
report. Trade estimates are as
follows:
Cattle on Feed 95 per cent
Placements 101 per cent